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Part 2: It’s All About Sales

September 16, 2012

In the last issue of Building Your Online Business, we talked about “assembling the engine”.  Specifically, we covered:

  1. The planning process for defining a customer-centric product concept;
  2. The importance of workflow to optimize the user experience around three key clicks and a minimum of entry fields; and finally
  3. How you can test before you build using PowerPoint to lower R&D costs while at the same time getting a more customer-validated product to market faster and on a lower budget.

This week, and over the next few posts, I’d like to focus on “tuning the engine”.  And to do that, we’re going to drill in to the wonderful world of metrics and site optimization.

Many forget that your online presence is ultimately all about sales. How do your customers buy?

Let’s say you’re walking down the street and see a shoe store. You look in the window and see a beautiful pair of shoes in the storefront window.  You walk in and look around. The store is clearly very trendy, nicely laid out and bustling with patrons. You decide to try on a pair of shoes and the store clerk explains to you how well the shoe is made, the fashionable style and that it’s available in a variety of colours.  The shoe fits well and it’s more comfortable than the one you tried on earlier that day so you decide to buy it.

Online sales are similar. For many businesses, the sales process can be broken down to five steps:

(1) Customers arrive at your landing page. Do I want to go into your store? Does your store look interesting? Do you solve my problem?

(2) Customers need to learn about your product and you need to establish some sort of a trusted relationship. What information do you provide to help your customers think of you as the expert – the most trusted vendor?

(3) Customers decide if your product solves their problem and sign up to learn more or to evaluate (trial) your product.  They’re very interested and are close to buying now.

(4) They’ve completed their research, checked out the competition and have decided to buy your product.

(5) They like your product enough to become a loyal customer, opting to rebuy and maybe tell their friends.

Inevitably, at each point in the sales process, potential customers are going to “leave your store” or leak from your funnel without buying.  Our first objective is to identify sources of leakage and to plug the biggest holes.  In order to do that, we need to build a metrics reporting system that allows us to measure our customer engagement as a baseline for continuous improvement.

Many of my clients use Google Analytics, a free tool to collect statistics.  KissMetrics is another powerful tool that’s very popular and incredibly powerful.

Here’s an example of a metrics report I recently developed for one of my clients.  Online Business Metrics Report

The report includes a roll-up page that summarizes the conversion rate for each stage of the sales process.  Each page covers a major source of traffic and includes three tables: (1) total traffic at each stage of the funnel, (2) percentage of users that advance to the next stage in the funnel; and (3) week-over-week trends.  Green is good, Yellow is okay and Red requires more attention.

Your management team should meet weekly with a set agenda where individuals are responsible for different points of conversion in the funnel.  The meeting Chair first reviews the overall stats: Good/Bad/Ugly.  Then each person presents the tests they ran last week, the results, conclusions and action items.  Then new tests are laid out for the following week.  All action items are formalize in keeping with a disciplined, metrics-driven “say what you’re going to do and do what you’re saying” culture.

We’ll spend a few issues talking about the various stages of the funnel starting next issue with your landing page strategy.  In the mean time, customize the metrics report spreadsheet for your business and implement Google Analytics or KissMetrics to start collecting results.

Continuous Improvement

It goes without saying that online businesses want to grow their user base and revenues.  But how? Where to focus time and resources?

There’s never been a better time to be an Engineer/Entrepreneur/Marketer.  Over the past few years, online marketing has become a very mathematical discipline built on the scientific method:  Hypothesis, test, measure, conclude.  In our case, we’ll modify this process a little:



  1. Identify an area we want to optimize,
  2. Build a test,
  3. Conduct side-by-side A/B testing,
  4. Measure results,
  5. Keep the winner and learn.



The power of the Internet allows us to do this on a daily/weekly basis, building a very powerful culture of continuous improvement that permeates the organization.

With the newfound power of online metrics, you may be tempted to measure everything, but online optimization is like designing a marble sculpture.  It’s best to start with a course chisel to build the rough shape and use successively finer tools over time. Tactics need to continuously evolve to keep pace with a constantly changing customer and competitive landscape.

  1. terryhatcher48 permalink

    I really love to read your blog as well as the examples that you’ve mention. Thank you so much for this helpful contents. I am looking forward to see more example contents like this.

    If you have time you can also visit this site that I managed to surf in Startup.

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